AT&T Exits Entertainment as TPG Takes Full Ownership of DirecTV

AT&T is officially out of the entertainment game.

The telecom giant has completed the sale of its remaining 70% stake in DirecTV to private equity firm TPG, ending a nearly decade-long run in the pay-TV business that began with a $67 billion acquisition in 2015. With the deal now closed, DirecTV becomes a wholly owned portfolio company of TPG Capital, the firm’s U.S. and European private equity platform.

This marks a full-circle moment. TPG already owned 30% of DirecTV following a 2021 deal that valued the business at $16.25 billion. That original partnership was meant to stabilize the declining satellite operator while AT&T focused on its core connectivity business. Now, TPG’s full control signals confidence in DirecTV’s future, despite the broader secular decline in traditional pay TV.

“DirecTV is a proven pay TV innovator, and we are excited to deepen our highly successful partnership at a pivotal time for the industry,” said David Trujillo, Partner at TPG. John Flynn, also a Partner at TPG, said, “DirecTV has the broadest diversity of programming available today, a portfolio of innovative video products and a legacy of providing better value than incumbent providers. The company is well-positioned to compete and thrive in a rapidly evolving content and technology landscape.”

DirecTV CEO Bill Morrow said the company plans to increase investment in streaming and video innovation. “We have big plans to increase investments in innovative video services to deliver the best entertainment experience at the right value for our customers nationwide,” he said. The company’s next-gen service has grown to millions of subscribers and maintains strong customer satisfaction ratings, according to TPG.

DirecTV last reported around 10 million pay TV subscribers. While far from its peak, it remains a meaningful base in a contracting market.

As part of the transaction, all of AT&T’s appointees to DirecTV’s board have stepped down. That includes Thaddeus Arroyo, Lori Lee, Jamie Barton, and independent board member Steve McGaw. Former Sony Pictures CEO Tony Vinciquerra has joined the board. He currently serves on the board of Madison Square Garden Sports and has previously served as an advisor or board member at Qualcomm, Pandora Media, Univision Communications, Motorola, and Fox Networks Group.

AT&T acquired DirecTV for $49 billion, or $67 billion including debt, in 2015. The deal quickly turned sour as cord-cutting accelerated. By 2021, AT&T had written down $15.5 billion on the business and began unwinding its media ambitions, including spinning off WarnerMedia.

The timing of the sale aligned with the expiration of a three-year restriction on divestiture, which ended in July. AT&T expects to receive $7.6 billion in cash payments from DirecTV and TPG through 2029, including $1.7 billion in distributions in the second half of 2024.

AT&T said the exit allows it to focus fully on its wireless and fiber strategies and to strengthen its balance sheet by pulling forward cash it expected to receive over the next several years. In its statement, the company said the sale enables it to “continue to focus on being the leading wireless 5G and fiber connectivity company in America.”

This deal closes independently of DirecTV’s previously reported merger discussions with Dish Network. While the companies explored a combination, the merger ultimately fell apart. The TPG deal was not contingent on that merger closing.